Tuas Limited

Thank you for standing by and welcome to the Tours Limited Half Year Financial Year 2026 results call. All participants are in a listen only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Richard Tan, CEO. Please go ahead.

Good morning and thank you for joining us. I'm Richard Tan. Chief Executive Officer of Simba Telecom, the principal operating entity of the Tuas Group. Also on the call today are Mr David Teo, Executive Chairman of Tuas Limited, and Mr Harry Wong, Chief Financial Officer of Simba Telecom. It's a pleasure to present the financial results for Tuas Limited for the half-year ending 31st January 2026, covering the period which started 1st August 2025. Let me briefly outline today's agenda as shown on slide two. We'll begin with Harry, who will walk through the financial performance and key metrics for the year. I'll then provide an update on our operational progress, status of M1 acquisition, and outlook for FY26. We'll conclude with a Q&A session to address any questions you may have. Please note that all financial figures discussed today are denominated in Singapore dollars. With that, I will now hand over to Harry to take us through the numbers.

Good morning everyone. My name is Harry Wong, CFO of Simba Telecom. I'll be presenting the financials of the TWAS Group. On slide 3, you'll see that we achieved a notable improvement in the financial results during the first half of FY26 when compared to that of FY25. Revenue for the half year is 91.9 million, up from 73.2 million for the same period last year. Pre-aggression cost amounting to 10.5 million was incurred. Excluding this, the underlying EBITDA increased 27%, up from 33.1 million to 42.1 million. We achieved a half year positive statutory net profit after tax of 8.2 million. which is a significant improvement on the prior period profit of 3 million. Next, we look at the revenue and EBITDA on slide 4. Revenue for the half year ending 31st January 2026 increased 26% compared to that of FY25. With the increased scale of the business, EBITDA margin has improved to 46% of revenue. Gross mobile output for the year was 9.61, The key driver of the EBITDA uplift is the increased subscriber base for both the mobile and broadband products. Our mobile plans include generous roaming data at every price point and broadband plans provide exceptional value, including premium Wi-Fi 7 routers and home phone lines as part of the package. Slide 5 shows our sustained mobile subscriber growth since FY23. As of 31st January 2026, we had about 1.412 million subscribers representing a 13% increase over the past half year. Slide 6 shows the broadband subscriber base. As of 31st January 2026, we had approximately 46,000 active services. We have gained traction in this segment and we have added 20,000 subscribers over the past half year. We proceed to the cash flow on slide seven. We continue to show positive cash flow. Opening cash and term deposit balance was $80.7 million. Net cash generated from operating activities was $50.1 million. The main cash outflow comes from acquisition of plant and equipment and intangible assets of $18.9 million. Lastly, mobile network and some fixed broadband infrastructure. We raised funds from capital markets of $360 million in support of the M1 acquisition. This brings the ending cash and term deposits to $478 million as of 31st January 2026. Again, positive cash flow after capex for the year is a welcome achievement. I should note that pre-acquisition costs that have been accounted for in this half year have not become liable for payment during the first half or since then. This explains a good portion of the positive cash flow outperformance compared to EBITDA. With this, Richard proceeds with the business updates.

Thank you Harry. Singapore's mobile market remains highly competitive and over the past financial year, Simba has continued to focus on delivering stronger value across all price points. This strategy has clearly resonated with consumers, as reflected in our robust subscriber growth. We have further enhanced our mobile offerings by adding two popular roaming destinations, Japan and Australia, as inclusions in the APEC tier to our higher value plans. This enhancement is an important part of supporting our continued growth in the mobile segment. To serve our expanding customer base, Simba continues to invest in network coverage and overall user experience. I am pleased to share that we have achieved another significant milestone. We have surpassed IMDA's regulatory benchmark of 95% 5G outdoor coverage, well ahead of the 31st January 2026 deadline. Flight 9 highlights the reasons behind the strong momentum in our fiber broadband business. The accelerated growth is driven by a clear, simple, and compelling value proposition. Through 10 gigabit per second symmetrical speeds, complemented by a premium Wi-Fi 7 router, modem, and a home phone line included as standard. We are also proud to share that Okla has awarded Simba both the fastest download speed and most reliable speed titles for the second half of CY25. Most listeners would have used Okla to do a speed test on your connectivity and they are widely regarded as an accurate global leader in internet testing and network intelligence. This recognition is a testament to our engineering excellence and our unwavering commitment to delivering the best possible service experience for our customers. Moving to slide 10, we appreciate shareholders' patience as we await IMD's decision on our proposed acquisition of M1. This is a significant transaction involving critical national infrastructure, and on a combined basis, it will create Singapore's second largest mobile customer base. Both Keppel and Simpa continue to work diligently through the regulatory process, and we remain fully committed to securing the necessary approvals. And finally, the business outlook. The first half of the year has established a solid platform for us, with sustained growth across both our mobile and fibre broadband segments. In line with this expansion, SIMBA standalone capex for the full year is expected to range between $50 and $55 million. We will continue to prioritize margin optimization and maintain disciplined cash management as we scale. I'll now hand back to the moderator for the Q&A session.

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. And if you're on a speaker phone, please pick up the handset to ask your question. Your first question comes from Raj Ahmed from Citigroup. Please go ahead.

Hi, morning. It's Raj Ahmed. Can you hear me okay? Yes. Yes, I have maybe three questions. The first one is just on the maybe a multi-part question on subs momentum. Pretty strong pickup in momentum in the half. Just keen to understand what drove that from your perspective, especially given your advertising and marketing spend is actually down year on year.

Okay. So obviously the momentum has been strong for the first half. And in part, I think it was, you could say that it was due to our announcement of the M1 acquisition because People are seeing us in different light. They know that we're a serious player and we are here to stay. And we have been delivering very good value across all of our service plans. So this has resonated, obviously, across our customer base as well as people who have not come on board yet. So we saw very strong momentum for the first half of the year.

And Richard, just in terms of first quarter versus second quarter, is there some seasonality or some sort of events that supports 1Q? I know 1Q is quite strong, 2Q is strong as well, but it is down quarter on quarter. Is there something that impacts it from like a seasonality perspective?

This is the typical seasonality effect because, as you all are well aware, the November and December traveling period is always very strong in terms of people leaving Singapore for their holidays. So a lot of people will sign up prior to that, and then they will return. Everyone goes back to work and school back in January. So you are obviously noticing the seasonality effect.

Actually, that's a good segue for my question. Just in terms of the current environment with fuel and everything like that, and given that traveling is a big part of your value prop as well, are you seeing any sort of – anything that you can call out based on current trends that you're seeing on that impacting your – The trends will be very similar to previous years, and we expect second half of the year to continue to exhibit good growth as well.

subject to the usual seasonality effects that we have seen over the past three to four years.

All right. Last one. In terms of just the gross margin, it seems like the network, the COGS has gone up quite a bit. Gross margin is down year on year. Is there some one-off in that that we should be considering?

Well, what we have been focusing on more is the EBITDA margin, and the EBITDA margin has actually grown by one percentage point. So I think that's the main thing to focus on.

Thank you.

Thank you. Your next question comes from Darren O'Dell from Peloton Capital. Please go ahead.

Congratulations on a strong result again. Just in relation to on the cost, the $10.5 million one-off cost in relation to M1, acquisition? I was just wondering, it's quite large. I was just wondering if you're able to break that down in a little bit more detail, please.

We're not providing any breakdown as of now, but it is a mixture of legal due diligence, tax due diligence, financial due diligence and financial advisory. So I think in the considering the size of the transaction, it is actually very, very reasonable.

And just in relation to just broadband connections, which have obviously been very strong in the last half, what's the sort of backlog look for that, or do we expect the same sort of momentum to continue in number of subscribers or to be increasing, or how should we be thinking about that in the future?

What I can say right now is that we're working very, very hard to build on the momentum that we have established And the fact that OCLA has given us the award puts us in a very, very good position to build on that momentum.

Okay, thank you very much.

Thank you. Your next question comes from James Bales from Morgan Stanley. Please go ahead.

Hi, guys. I guess I'd like to build on those questions about the acceleration in mobile and the strength in broadband subs. You talked about it being a question of brand awareness, durability, value that is in the consumer's mind. Should we extrapolate that the acceleration that you've seen in the first half is sustainable throughout the year and into FY27?

So to be specific, are you referring to mobile or fiber broadband?

Well, I'm referring to both. I guess I'm a bit surprised on broadband where there's a two-year term, it's a commoditized product all selling the Netlink service. How you've managed to scale that so fast and whether we should expect that that continues in the same sort of way?

So I think you would have seen that our value proposition is very strong. We have included a lot of value. And the router that we are offering, it's a really good router product. No compromises because, for example, it has a true 10 gigabit per second Ethernet port. And we have also added a home phone line as well. So with the awards that I've mentioned from Okla, that puts us in a very good position. And people have been signing up through word of mouth. They have experienced very, very good service from both Simba, and the performance has been great. And obviously, we've been spending on marketing as well to ensure that the awareness is built up across the board. So with that foundation laid, that has put us in very good standing in terms of continued growth for broadband. Mobile, I think we are very well established across all segments, and we have seen good gains in these different segments, which I have alluded to, and these include, for example, the mass market, and foreign worker segment is something that we've always been very strong in. So without a doubt, our penetration is now deeper, our growth is more broad-based, so that gives us also a good foundation for continued mobile growth.

That's really good context. And then I guess the other question I had was around M1 deal completion. This has taken a lot longer than you'd thought. Can you help us understand the... in your mind what's changed and you would have expected that this deal completed last year or in January when you first announced it. Can you help us understand why it's taken longer and whether your confidence in closing it has changed at all?

Well, as I've indicated in my presentation, it is an important transaction. What I did not say, for example, is that this is the first time that the market is undergoing consolidation. So obviously, you know, there are all aspects of the matter that IMDA will need to weigh upon. So I'm not surprised, and we are both parties, meaning Capital and Simba, we're working diligently to gain regulatory approval as we go through the process.

Perfect.

Thank you. Once again, if you do wish to ask a question, please press star 1. Your next question is a follow-up from Raj Anand from Citigroup. Please go ahead.

Hi, it's Raj again. Richard, just on a follow-up to James' question on the timeline, is there any sort of indication that's been given to you on potential completion timelines, or is it just open-ended from your perspective?

I don't think it's appropriate for us to set any expectations with regards to the timeline. All I would say right now is that the engagements on a joint basis with the regulator, they are ongoing. So I think that's very important in terms of keeping the dialogue going.

Okay, got it. On that as well, I think there's a six-month sort of agreement with Keppel in terms of the deal. completing. I'm guessing that's, I think that's in sort of end of March, I think. I'm guessing that's been extended. Is that fair, given that both of you are talking with IMDA?

We are aware of it, and both parties are working to extend it.

Last one, just on CapEx, I know that sometimes there is seasonality. I think first half was only 19 million. You're retreating the CapEx guidance. I'm just wondering whether Is it sort of you're keeping the second half seasonality because of the deal, impending deal, or is it just timing related?

A lot of it is timing related because we initially spend more on CapEx, for example, building up our 5G coverage. But obviously we are keeping in mind the need for us to continue to support our growth and that is why we're keeping to the 50 to 55 million capex expectation for the financial year.

Thank you.

Thank you. There are no further questions at this time. I'll now hand back to Mr Tan for closing remarks.

Thank you all for your time and for engaging in our business update. The board and management of TWAS Limited deeply appreciates your continued support. We look forward to delivering further value and growth in the months ahead. Thank you.

That does conclude our conference for today. Thank you for participating. You may now disconnect.